Benefits of Being a Specialist in the AEC Industry

Is your design or construction company specialized? Or do you just take in any work that comes your way? Maybe being a generalist isn’t your chosen strategy; it just seems like the least demanding way to do business. I urge you to reconsider. Specialization has its challenges, but it usually leads to better business results.

Generalists often fear that putting all their eggs in one basket will be risky. If demand for your specialty suddenly drops, what would you do? At first that reasoning seems valid, but only if you’re happy to stay in a low-risk, low-return position.

What happens when there are dozens – or hundreds – of generalists competing for the same projects? Since many companies are “good enough,” price becomes the client’s main decision-making criterion. You’ll have to find ways to become more productive than the others, or your profits will take a nosedive. In fact, most generalists won’t do very well financially even in a booming economy, since the costs of labor and material also go up.

Specialization as a strategy

Specialization is not the silver bullet for everybody. It takes time and effort to build a business that’s among the best in its class. However, once you master your area (and are willing to think big) you can achieve amazing results.

Choosing an area of specialization, and mastering it, offers many benefits:

  • Better-than-average profitability through value-based or premium pricing
  • A manageable number of repeatable processes that become more and more efficient over time
  • Constant learning that gives you the upper hand while competing with less specialized firms
  • The chance to build a strong brand that connects you with your specialty in the clients’ minds

I’ve often used Hermann Tilke, a German architect and engineer, as an example of successful specialization. He turned his passion for car racing into a design career. He started off with a short access road design at the Nürburgring in the 1980s. Now he’s the leading designer of Formula One motor racing circuits. His company, Tilke Engineers & Architects, provides complete solutions for motor racing and test facilities. There can’t be many Formula One circuit designers in the world, but if you can specialize in something like that, you’ll probably profit more than a run-of-the-mill engineering firm.

When does specialization make sense?

How can you find a customer need that would have enough potential for specialization? Consider the following:

  • You can define a segment of clients that is large enough for the solution (e.g., private health care organizations, social housing clients, railway operators, first home buyers, etc.)
  • There are already companies operating in the same sector, but without a clear strategic intent or differentiation
  • You can show clients how a specialized provider will maximize their value
  • Economic downturns do not reduce the need for this service in all market areas, and the need is not sensitive to economic fluctuations
  • There is a path for growth by extending the core service

Think about your company’s strengths, and the projects that have achieved better-than-average results. Also look for unmet client needs. Then imagine focusing on a certain need and becoming the expert in that field.  What difference would that make to your business – and your success?